IRS Wants To Tax Stateless Income
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If you pay taxes to the IRS and your state government every year, the idea of stateless income may sound fanciful. can have a kind of stateless income. They have to file federal tax returns, but as they don t reside in any state, they don t have state income. But this isn t what the IRS means by stateless income.
Instead, the IRS is referring to patagonia interlodge jacket reviewglobal companies like Apple, Starbucks and Hewlett Packard. Such companies aggressively put income in pockets around the world in ways the IRS doesn t like. The IRS isn t alone in not liking it. The G20 countries and the Organization for Economic Co operation and Development (OECD) have been calling it tax manipulation.
The OECD, which advises the G20 on tax and economic policy, says existing national tax enforcement regimes just don t work. See G 20 Nations Fully Endorse OECD Action Plan on Tax Evasion. The OECD plan claims that companies like Apple and Google avoid billions in taxes. The G20 is made up of 19 leading world economies plus the European Union. It too has voiced support for a fundamental reassessment of the rules on taxing multinationals.
Global companies have big incentives to source income in tax havens. Even more manipulative, they may have income that is sourced nowhere at all. Professor Edward Kleinbard of the University of Southern California Law School is generally credited with coining the stateless income phrase in 2007. He was formerly the Chief of Staff to the Congressional Joint Committee on Taxation. Since then, a lot of income has become stateless and many companies say they have it.
And that means scrutiny from the IRS. Today, the IRS is seeking new ways to pursue stateless income and profits offshore. taxes in 2012. The key was offshore units with no tax home. Apple s CEO Tim Cook testified that companies engaged in this high stakepatagonia coupon free shippings game are doing nothing illegal.
Taxes are complex and companies are arguably obligated to their shareholders to take advantage of tax breaks offered by governments to create jobs and business. if they could only do it in a way that won t be taxed. And the amounts at stake are staggering. companies are said to have more than $1.5 trillion sitting offshore. Treasury Secretary Jack Lew has said. See Ipatagonia nsp discountRS pursuing stateless income tax enforcement.
Confidence, yes, but Secretary Lew might well note the impact on the Treasury too. In any event, it is not clear how far the IRS will go with its new push. It s also not clear how the IRS hopes to get there. The IRS hasn t done especially well in transfer pricing cases.
Besides, the money at stake is enormous. Plus, the companies involved have treasurpatagonia guide pants women'se troves of cash for many war chests. Big and protracted battles seem inevitable. Still, some big companies may be in for battles that are even larger than they think. They may even need to think different. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
i agree that the taxation rules of off shore accounts is ridiculous in terms of the percentage that is taken from money as it is divested from said accounts.
my issue is taken in the ability of culprit companies to be able to document that their headquarters is in [lowest corporate tax location] and their ability to rewrite that location, on demand, based on the change of that tax code at that time. is google or apple really headquartered in ireland? no one really believes that. but by law, they are within their means to make that claim. so if say, 60% of that companies money is un taxable due to those rules, then yes, those rules need to change.
if my company made 90% of its revenue in a certain country, but then was able to off load the tax burden of my corporate entity due to my headquarters being in a lower tax location, outside of that country wherein the majority of revenue and thereby profit was found; i call that unfair and abuse.
if we can gpatagonia coupon free shipping2et over this notion of pointing fingers and how everyone that has money [in large quantities] will make the bpatagonia coupon free shipping0est of the situation and move it to where ever lowers their pay out burden, then we can finally talk about solutions and fairness.
what is truly sad is we continue to have new taxes forced down our throats when in reality we shouldn t have any new taxes. entitlement programs and new taxes are killing this country.
over the last 50 year we have had over 100 new taxes. we tax on top of other taxes. why, our government is 70% to big. our government has proven everything they try to run is over budget and has more waste involved than the New York City dump. It is probably easier and better to stop expansion and growth in the first place than to cut back. But many studies show that a flat (or modified flat) tax could have very low rates compared to what we have now and still raise the same revenue. I believe that s true with corporate as well as individual taxes. But the debates rage and we can t seem to get any of the simpler proposals enacted. Sadly, there may simpatagonia outlet store nevadaply be too many vested interests to do it.
The size of Government as a percentage of GDP, the most reasonable, measure, is not an all time high. Nor is it particularly big by the standards of advanced economies. The big government ideology is a particularly American conceit. While China has roared ahead for the 30 years, America has stagnated in its cities, infrastructure and industry under the corrosive influence of Reaganism with its obsolete claptrap and discredited economics from the era that triggered the last Great Depression with much the same results: massive economic disruption, although not the Big One yet, huge disparity of wealth and declining social mobility. We need only return to the buy and selling of human persons to complete the loop.
So called flat taxespatagonia discount code aeropostale are a con job. If you can t calculate the tax rate on your taxable income by hand, computer, or table look up shame on you. The complication comes in the corrupt definition of income. Consider that if you sell something it is income. But if you get smart a borrow against is economic worth, it is not. The proposal are to tax consumpution transaction but not financial transactions. Why not? Interesting distinctions. Why is unearned income on speculation taxed less than hard earned income by work? Why are exemptions structured overwhelmingly to favor the well off and basically denied to salaried wage slaves? The complication and the dirty dealing is in the accounting tricks, not in simply calculating the results. So until you are willing to come cleaning about the definition of income and even handedness of the deduction the whole exercise is as dishonest aspatagonia coupon free shipping3 the supposed corporate tax rate which is the better part of nothing in reality.
When looking at this whole issue, its worth understanding some history and background. The current system of tax treaties and international structuring arose from a desire by many national governments to try and maximize the tax revenue they collect. They did this by recognizing that there are constantly situations wherpatagonia everlong review kohlse an international corporation may be obligated to pay tax to several jurisdictions on the same revenue (aka double taxation). Of course, this would result in no net revenue and thpatagonia everlong review queste corporation going bankrupt.
Therefore in order to attract the good or service to their jurisdiction; try to get as much tax revenue as possible; and try to encourage the corporation to set up some of its physical structure and work force in their jurisdictions, countries like the US, UK and Ireland set up tax treaties between themselves and other countries. It is key to understanding this underlying motivation for the current system. This system arose not out of some noble desire to relieve taxpayers of the unfairness of double taxation or even at the bequest of the lobbyists of those taxpayers. It came out of a logical self interest of various governments.
With this background in mind, let s look at Twitter, Apple, Google and Starbucks (which are all under fire in the international media for their tax planning).
Many US politicians and citizens want these companies to pay US tax on its WORLDWIDE income, including income earned from foreign customers. They argue that while this may not be legally correct, it is MORALLY correct because all three companies were a) Founded, IPOed (or will in the case of Twitter) and has their headquarters in the US; AND b) The citizens of the US are suffering in a financial downturn and deserve this money;
Many foreign politicians and citizens want these companies to pay more tax on the revenue generated from customers in their country. They argue that while this may not be legally correct, it is MORALLY correct because a) The company is deriving income from tax resident individuals and corporations; AND b) The citizens of these countries are suffering in a financial downturn and deserve this money;
All four companies want to maximize their net revenues ( gross revenues minus expenses including tax equals net revenue ). Each company used the tax treaty network and international structuring regime to minimize their global tax burden. As part of this structure they may have to set up operations in places likpatagonia coupon free shipping1e Ireland; or assigned intellectual property rights to places like the Netherlands. However there are important differences betwepatagonia guide pants 14wen these companies;
Starbucks needs to respond to this Moral but not legal obligation demand because a) It has physical facilities in the foreign country which could be picketed or damaged reducing sales; and b) There are many competitors in these countries who could easily service customer needs and decrease gross revenues. As a result, it is logical that Starbucks may consider paying more tax in the foreign country or the US than legally obligated in order to maintain gross revenues and thereby maximize net revenue. This is exactly what they recentlpatagonia messenger bag tutorialy did in the UK!
